VALUATION & RECOMMENDATION
We are positive about Tata Steel's multi-pronged strategy: first to aggressively scale capacity in fast growing Asian market from around 8 mtpa capacity currently to reach 37 mtpa by FY15E; and second to maintain Corus's market-leading presence in premium products and improve its raw material security. Apart from Arcelor Mittal, Tata Steel is the only global leading player, with strong presence in both Asia and Europe, which gives it benefits of:
(i) scale and premium positioning (due to its European operations),
(ii) the tremendous surge in international steel prices; and
(iii) strong margins and volume-based growth (due to its Asian operations).
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